A Hollywood director who took $11 million from Netflix to finish a TV show, then gambled it on crypto, is heading to prison.
Carl Erik Rinsch, who directed Keanu Reeves in the 2013 film "47 Ronin," was sentenced on Monday to 30 months for defrauding Netflix, capping a saga of failed trades and lavish spending. U.S. District Judge Jed Rakoff also ordered three years of supervised release and $11 million in restitution.
Netflix had paid Rinsch's production company more than $44 million to make a sci-fi series called "White Horse," later retitled "Conquest." In 2020, as the COVID pandemic hit, he asked for another $11 million to finish it. Instead, prosecutors said, he moved most of the money into a personal brokerage account and never delivered the show.
Rinsch lost $5.9 million within weeks on speculative options, including pandemic-era bets on a COVID drugmaker and a market crash, according to court filings. He then moved more than $4 million of what was left onto crypto exchange Kraken and bought Dogecoin.
His bet paid off spectacularly: as the meme coin soared, he cashed out nearly $27 million in May 2021, according to a 2023 New York Times report. "Thank you and god bless crypto," he wrote to a Kraken representative.
That windfall funded a spending spree. Rinsch bought five Rolls-Royces and a Ferrari, a $388,000 Vacheron Constantin watch, and millions more in furniture, antiques, and designer clothing, some $8.7 million in all, according to a forensic accountant hired by his ex-wife. Rather than return the money, he sued Netflix for more than $14 million he claimed he was owed; an arbitrator ruled against him.
A Manhattan jury convicted Rinsch in December on charges including wire fraud and money laundering. He faced up to 90 years, and prosecutors sought five, but Rakoff imposed a lighter term after the defense presented evidence of an untreated mental health condition, with family, friends, and former colleagues describing a marked change in his behavior beginning around 2019. Reeves, who also produced the doomed series, urged leniency in a letter to the court.
The judge was unmoved on the core conduct. "Improper medication" may have “played a role,” Rakoff said, but Rinsch "was determined to lie to get substantial monies from Netflix." U.S. Attorney Jay Clayton, the former SEC chair, said Rinsch "made risky bets on highly speculative stock options and cryptocurrency," and that the sentence "sends a deterrent message.”
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